Dynamic Model of Markets of Homogenous Non-Durables

Joachim Kaldasch

EconStor Open Access Articles and Book Chapters, 2015, vol. 9, issue 3, 1-12

Abstract: A new microeconomic model is presented that aims at a description of the long-term unit sales and price evolution of homogeneous non-durable goods in polypoly markets. It merges the product lifecycle approach with the price dispersion dynamics of homogeneous goods. The model predicts a minimum critical lifetime of non-durables in order to survive. Under the condition that the supply side of the market evolves much faster than the demand side the theory suggests that unsatisfied demands are present in the first stages of the lifecycle. With the growth of production capacities these demands disappear accompanied with a logistic decrease of the mean price of the good. The model is applied to electricity as a non-durable satisfying the model condition. The presented theory allows a deeper understanding of the sales and price dynamics of non-durables.

Keywords: non-durables; homogeneous goods; product lifecycle; economic growth; price dispersion; electricity market (search for similar items in EconPapers)
JEL-codes: D L1 P42 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Dynamic Model of Markets of Homogenous Non-Durable (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:espost:114165

DOI: 10.9734/BJEMT/2015/19254

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